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Nortel-Microsoft Alliance Gets Real

Microsoft and Nortel Networks, which have been talking about their Unified Communications Alliance since it was introduced last summer, are now beginning to put products and release dates into the mix.

At an event in New York Jan. 17, executives from both companies outlined a series of integrated offerings that are due this year. The announcements helped the companies address critics who found little substance to the partnership as it was originally outlined in June.

"They announced the skeleton of what this would look like six months ago," said Zeus Kerravala, an analyst with Yankee Group. "Ive been skeptical of partnerships—most dont pan out. Theyre actually showing meat on the bone now. The fact that they have joint customers and a strong product road map shows this is more than a partnership in name only."

The first of the new deliverables will be a joint unified messaging offering that provides interoperability between Nortels Communication Server 1000 and Microsofts Exchange Server 2007 that is expected to be released in the second quarter of this year. It represents the first integration of Exchange with Nortels native implementation of the industry-standard SIP (Session Initiation Protocol). Nortel will supplement the offering with its professional services for design, deployment and support.

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Due in the fourth quarter are the UC Integrated Branch and a new conferencing offering. The UC Integrated Branch will provide a single hardware device that combines routing, switching, VOIP (voice over IP) and unified communications.

"With this, weve converged branch infrastructure from many boxes to one solution with a truly seamless experience. This combines routing, switching, VOIP and all the capabilities from Microsoft in a single device that is cost-effective and can be the engine for new growth in branch offices," Nortel CEO Mike Zafirovski said.

The conferencing offering will deliver the functions of Nortels Multi-media Conferencing product in Microsofts Office Communicator 2007. The aim is to provide a consistent user experience across voice, instant messaging, presence, and audio conferencing and videoconferencing, the companies said.

The companies also this year will address unified communications for large enterprises and carriers by adding support in the Nortel Communications Server 2100 for a unified desktop and soft phone for VOIP, e-mail, IM and presence. The Communication Server 2100 supports as many as 200,000 users on one system.

By cross-licensing much of its VOIP technology to Microsoft, Nortel, some industry observers believe, is relying on building up a services business to replace the product revenue it will lose. The question is whether Nortel can expand its professional services operation quickly enough.

"Nortel has been trying to rebuild their services organization for a while. The increased revenue [theyll see] with Microsoft gives them a fighting chance, but history shows theyve had a hard time doing that," said Yankee Groups Kerravala.

The road map outlined by Microsoft and Nortel describes a shared vision of how small and large enterprises will move from todays segmented market with separate "islands" of text messaging, voice mail, e-mail and IM into more advanced integration and finally a transformation in which users interact with a common smart client and an integrated back-end infrastructure, said Microsoft CEO Steve Ballmer.

"Were the only company whose road map talks about a smart, unified client that largely builds on the popularity of our Windows and Office software," Ballmer said. "Were the only company to talk about a unified development and management platform at the server level."

In the second integration phase, which Ballmer said will start this year and will move into full swing by 2009, the two companies expect the "notion of separate PBX and server software will give way to a world in which [Microsofts] Office Communications Server and Nortels feature server [deliver] the full telephony experience on [Intel-based hardware and] Windows development and management tools and deliver a common experience."

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